It’s been a tough experience for the crypto market through 2022. In November, the market had dipped by 70% from its previous peak on November 20, 2021. When things were going downhill and down, the FTX crash turned things more dire. The question is, can the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has had many drops in the past. Every time, it’s bounced back with a big rally.
For example, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for more than a year before hitting a low of $150. But, in 2017, it broke that record, and hit a new high of $19,600. In 2018, it was trading at $3,100. In 2020, it broke that resistance and hit a new high of $68,000 in November 2021. Just like that, we’ve witnessed another drop. However, history has shown us that at the end of every dip the bull runs.
Every Dip is Followed by a Long Bull Run
As we’ve seen before, fall-offs are typically followed by a lengthy bull run that eventually breaks through the resistance created by the previous market’s highest price. This is evident in more than Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has come a long way in the last few years. With more and more companies and industries embracing the technology, its use and acceptance is rising. From banking to gaming, crypto is being used in a myriad of ways. And this growing use case could result in increasing participation in the market and, in turn, boost prices.
A rise in the interest of institutions for cryptocurrency
In recent times we’ve witnessed a rising curiosity from institutions investing in cryptocurrency. From hedge funds to banks, many large institutions are now exploring the potential of crypto assets. This increased interest from institutions can bring stability to the crypto market and result in more expensive prices.
Government regulations
As the market for crypto grows, governments around the world are beginning to develop more favorable rules for crypto. This is likely to attract more investors as well as increase the acceptance of crypto in general.
More use cases for blockchain
The technology that is the basis of the majority of cryptocurrencies, blockchain has a wide range of applications that go beyond the realm of financial transactions. In addition to supply chain management, voting and other systems industries are beginning to look at ways they can benefit from blockchain technology. This will increase investment and enthusiasm in cryptocurrency.
Technology advancements
Blockchain and cryptocurrency technology is still in the early stages of development. As advancements continue to be made in areas such as security and scalability, potential of crypto assets will grow. This could lead to greater use and increase in prices.
Rising global economic uncertainty
With the ongoing instability in the economy caused due to the COVID-19 pandemic and other factors increasing numbers of investors are starting to look for safe haven assets like gold and crypto. Because the global economic climate is uncertain and uncertain, this could lead to increased demand for crypto and higher prices.
Interest from retail investors
Investors from institutions aren’t the only ones showing interest in cryptocurrency. Retail investors, or even individual investors, are also starting to get involved in the crypto market. With increasing numbers of people learn about cryptocurrency and investing in it, this could lead to an increase in demand and consequently higher prices.
Growing awareness and acceptance of cryptocurrency
As the crypto market continues to mature, more and more people are starting to learn about and understand it. As the awareness and acceptance of cryptocurrency grows, it will lead to more people purchasing and holding crypto, which could drive up prices.
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The Decentralized Finance (DeFi) is an emerging area of the crypto market that enables finance services developed on top of blockchain technology. As DeFi continues to grow and more platforms and projects are launched, it could lead to increased adoption and increased prices for crypto.
Developments in crypto payment methods
As the market for crypto grows increasing numbers of companies are beginning to accept crypto as a form of payment. This could lead to an increase in the use of crypto in everyday transactions, and a rise in prices.
More investment from sovereign wealth funds
Sovereign wealth funds, which are owned by the state as investment vehicles, are now beginning to look at crypto as an asset class. As more funds dedicate a part of their portfolio to crypto, this could lead to increased demand and higher prices.
Utilization of crypto to make international payments
One of the biggest benefits of crypto is its capability to perform swift and affordable cross-border transactions. As more individuals and businesses start to utilize cryptocurrency for international transactions it could result in increased demand and higher costs.
Increasing numbers of crypto ATM’s
As the number of crypto ATM’s increase it will be easier for individuals to purchase and store cryptocurrency, which can drive up demand and prices.
Development of security tokens
Security tokens, or digital assets that are used to represent ownership of an asset, such as real estate or stock are rapidly expanding sector of the crypto market. With the increasing number of security tokens being created and traded, it could result in a rise in demand and consequently higher prices for crypto.
More adoption by merchants
In the event that more businesses accept crypto as a form of payment, this will make it more convenient for people to utilize and store cryptocurrency, which will boost demand and increase prices.
Will crypto be on the rise in 2023? It’s only time to find out. But with these factors in mind, it’s likely that the crypto market could have a rebound by 2023. If you’re committed to the long haul, being patient and disciplined is crucial.